Proposed new IRS definition will be “substantial burden” to more than 100,000 non-profit organizations, could “turn-off”volunteers from civic engagement

(Washington, DC) – Judicial Watch announced today that on January 28, 2014, it sent a letter to Office of Management and Budget (OMB)requesting that it direct the Treasury Department to withdraw a new Internal Revenue Service (IRS) proposal to redefine “political activity” in a way that could place a “substantial … record-keeping and collection of information burden” on more than 100,000 non-profit organizations.

Under a new Notice of Proposed Rulemaking, Guidance for Tax-Exempt Social Welfare Organizations on Candidate-Related Political Activities (NPRM), the Obama IRS seeks, without the approval of Congress, to rewrite the decades-old definition – “participation of intervention in political campaigns on behalf of or in opposition to any candidate for public office” – with a new term – “candidate-related political activity.” According to Judicial Watch, the Paperwork Reduction Act of 1995 (PRA) submission filed by the IRS to support its proposal redefinition “does not analyze the substantial burden this new term will place on nearly all of the more than 100,000 501(c)(4) organizations,” and is therefore “fundamentally flawed.”

The letter to OMB was signed for Judicial Watch by attorney Alan P. Dye, a recognized national expert in non-profit law and government regulation, of the law firm Webster, Chamberlain & Bean, LLP.

Specifically, the Judicial Watch letter to OMB cites the following “flaws” in the IRS PRA submission:

First … the Service [IRS] fails to mention, let alone review and evaluate as required under PRA, the burden of the collection of information arising out of its replacement of long-standing language … The new term … includes several activities … that under the long-standing concept would not be treated as political activity … Although the Service is now proposing to regulate these activities (by limiting their amount), it does not analyze the burden arising from its landscape-changing definition.

Second, ‘burden’ is broadly defined in the PRA to include all of the ‘time, effort, or financial resources expended by persons to generate, maintain, or provide information to or for a Federal agency,’ including any time or other expenditure needed to review instructions, acquire technology, or search data sources … Yet, the Service has completely ignored these components of burden.

Third, the new inclusion of volunteer hours imposed an additional layer of recordkeeping and burden upon these non-profit organizations, many of which rely heavily upon local volunteers … Anyone who has worked with volunteers knows that recordkeeping can be notoriously difficult – how many volunteers are going to want to fill out time cards for their service? How many volunteers are going to be turned off from civic engagement due to this paperwork burden?

“In short,” the Judicial Watch letter concludes, “the Service has failed to address the collection of information arising out of the NPRM’s new term … Consequently, the Service has not reviewed and evaluated the substantial burden this new term will place on nearly all of the 100,000 501(c) (4) organizations … [W]e respectfully request that the Director disapprove of the collection of information contained in the NPRM ….” Because Judicial Watch does not engage in political activity, the NPRM does not directly affect the organization.

“The Obama IRS wants to kill the conservative movement with paperwork and regulation,” said Judicial Watch President Tom Fitton. “These new IRS rules violate the law and could, through First Amendment-killing paperwork, freeze millions of patriotic volunteers, from both sides of the political divide.President Obama and his administration ought to start obeying the law rather than rewriting it.”